The lower EU court, the Court of First Instance, has today
finally ruled in two judgments on the merits in two cases brought
back in 2001 against EU implementation of UN Security Council
sanctions concerning alleged terrorists, whose assets and income
were frozen to prevent them from giving financial support to
the Taliban regime and (subsequently) to Al-Qaeda.

These are the first judgments on the merits of cases concerning
challenges to EU implementation of Security Council resolutions
concerning terrorist financing. There have been earlier orders
of the Court of First Instance concerning requests for interim
measures to suspend the EU measures (all these requests were
rejected) or ruling certain challenges inadmissible for legal
reasons (these inadmissibility decisions are all on appeal to
the EU's highest court, the Court of Justice).

The challenges to the EU neasures were rejected in both cases
decided today, but either or both judgments could be appealed
to the EU's Court of Justice by the applicants within two months.
The judgments could also be cross-appealed on some point by the
EU Council or EU Member States.

Further cases challenging EU sanctions measures, mostly (but
not entirely) raising very similar or identical points, are pending
before the Court of First Instance. Some of these cases concern
separate EC legislation implementing separate Security Council
resolutions concerning international terrorism in general, as
distinct from Al-Qaeda [for information on the various "terrorist
lists" see Statewatch
observatory].

The judgments could also be relevant to the controversial
cases where the EC adopts sanctions measures which do *not* implement
resolutions of the UN Security Council. In such cases, the EC
would not benefit from the special protection which this judgment
would confer upon it when it is implementing Security Council
measures.

The judgments of the Court of First Instance are separate
but nearly identical. They address a number of important points
concerning human rights law, international law (in particular
the UN Charter, the status of the Security Council, and the principle
of jus cogens) and EC powers to adopt sanctions.

Summary of the judgment

The Court of First Instance (CFI) first finds that the EC had
power to adopt rules concerning sanctions against individuals.
There are two elements to this issue. In one of the two cases
(T-306/01 Al Yusuf), the Court finds that the EC has powers pursuant
to its powers to interrupt economic or financial relations with
third countries to implement sanctions against individuals allegedly
contributing financially to the Taliban regime and Al-Qaeda,
in the period when the Taliban regime controlled much of the
territory of Afghanistan. In both cases (the Al Yusuf case and
T-315/01 Kadi), the Court rules with rather greater hesitation
that the EC has powers to implement sanctions against individuals
allegedly contributing financially to Al-Qaeda, even after the
period when the Taliban regime controlled much of the territory
of Afghanistan. In the Court's view, the EC lacks the power to
take such measures pursuant to its economic sanctions powers,
since such measures are not designed to interrupt economic relations
with third countries. The EC also lacks the power to take such
measures on the basis of the 'residual powers' clause in the
EC Treaty (Article 308 EC), which 'fills the gap' to give the
EC power to act where no express powers have been conferred by
the Treaty (subject to unanimous approval of Member States, and
subject to certain conditions). But in the view of the Court,
the sanctions powers and the 'residual powers' clause nevertheless,
*taken together*, confer the power on the EC to take such measures.

Next, the Court explains in detail the relationship between the
UN Charter in general and the Security Council in particular
and EC law. In the Court's view, it is necessary to examine this
issue before appraising the arguments that the sanctions measures
breach human rights. This is the first time that an EU court
has examined this issue in any detail.

The Court states that the UN Charter has primacy over all other
international treaties and domestic law according to its terms.
Also, according to Article 307 EC, EC Member States are obliged
to apply international treaties that bound them before their
EC membership, in the event of a conflict with EC law. Although
one Member State (Germany) was an EC Member State before it joined
the UN, the CFI holds that this rule applies to Germany too.

Next, the Court reiterates its prior case law that the EC is
not a party to the UN Charter, so is not directly bound by it.
But it goes on to state that the EC 'must be considered to be
bound by the obligations under the Charter of the United Nations
in the same way as its Member States', because of the EC Treaty.
The Court appears to be suggesting that the previous case law
only ruled on the position under international law, not under
the EC Treaty.

The Court then rules that it cannot examine the legality of Security
Council acts from the perspective of EC law, even from the perspective
of human rights law. But it can examine the legality of Security
Council resolutions to see if they violate 'jus cogens' -- the
rule of international law that there are some international rules
so important that they take precedence over every other form
of international law. This is believed to be the first time that
an EU Court has even referred to the principle of 'jus cogens',
never mind applied it to a specific case. Finally, the Court
then examines whether any jus cogens rules are violated in this
case as regards the right to property (with a brief mention of
the right to be free from inhuman or degrading treatment), the
right to a fair hearing and the right to a judicial remedy. It
concludes that such rules have not been broken.

Statewatch does not have a corporate
view, nor does it seek to create one, the views expressed are
those of the author.
Statewatch is not responsible for the content of external websites
and inclusion of a link does not constitute an endorsement.